Did FinTech Lenders Facilitate PPP Fraud?
Journal of Finance, Forthcoming
115 Pages Posted: 18 Aug 2021 Last revised: 17 Aug 2022
Date Written: August 15, 2022
In the $793 billion Paycheck Protection Program (PPP), we examine metrics related to potential misreporting including non-registered businesses, multiple businesses at residential addresses, abnormally high implied compensation per employee, and large inconsistencies with jobs reported in another government program. These measures consistently concentrate in certain FinTech lenders and are cross-verified by seven additional measures. FinTech market share increased significantly over time, and suspicious lending by FinTechs in 2021 is four times the level at the start of the program. Suspicious loans are being overwhelmingly forgiven at similar rates to other loans.
Keywords: FinTech, Paycheck Protection Program (PPP), Misreporting, Fraud
JEL Classification: G21, G23, G28, H12
Suggested Citation: Suggested Citation